Whoops! McDonald’s Accidentally Illustrates That It’s Impossible to Live on Minimum Wage

What’s the best way to help minimum wage workers manage their finances? If you said, “design a financial planning site that presumes they work a second job and don’t need groceries,” you have a bright future ahead of you designing financial planning sites for McDonald’s employees.

The Practical Money Skills site, which was developed in cooperation with Visa and Wealth Watchers International, provides a budget journal for workers and assumes that they make $7.72 an hour, which is the salary of the average McDonald’s cashier and slightly higher than the federal minimum wage of $7.25. (The Atlantic points out that 19 states and the District of Columbia have set their minimum wages higher than the $7.25 floor.)

Let’s do some math. If a cashier makes $7.72 an hour, and works 40 hours a week, 52 weeks a year, he or she earns a yearly salary of $16,057.60, before taxes. That puts them at just above the federal poverty threshold of $15,510 for a family of two.

“Hang on a second,” we hear you say. “Why a family of two?” OK, good point. If it’s a family of one, then our hypothetical cashier is doing swell compared with the federal poverty threshold of $11,490 for one person. But we can be forgiven for making the leap. After all, it seems that McDonald’s did when they put together their budget.

sample budget

That’s right: This budget, which assumes an after taxes take-home pay of $1105 per month, also assumes that the worker will have a second income. Also that their heating bill will cost a total of zero dollars and zero cents per month, that they can buy groceries out of their $27 a day spending goal or their $100 monthly allotment for extras, and that their health insurance costs $20 a month.

“Now, it’s possible that McDonald’s and Visa meant this sample budget to reflect a two-person household,” writes Jordan Weissmann at The Atlantic. “That would be a tad more realistic, after all. Unfortunately, the brochure doesn’t give any indication that’s the case. Nor does it change the fact that most of these expenses would apply to a single person.”

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(Photo Credits: Allan Ferguson)